IDEAS home Printed from https://ideas.repec.org/a/spr/jogath/v54y2025i2d10.1007_s00182-025-00956-0.html
   My bibliography  Save this article

Using ultimatum power as a leverage in resolving a bargaining conflict

Author

Listed:
  • Emin Karagözoğlu

    (Bilkent University)

  • Kerim Keskin

    (ADA University)

Abstract

We introduce an arbitrator into a well-known bilateral bargaining game (see Nash Econometrica 21:128–140, 1953). This arbitrator (i) (optimally) splits a unit-size pie into two pieces, k and $$1-k$$ , (ii) lets players divide k in a simultaneous-move bargaining game, and then (iii) assigns an ultimatum power to the less greedy player in that game in the division of the remaining portion. Our modeling choices are motivated by gradualism (step-by-step approach), reasonableness (no severe punishment), and promotion of agreeableness (assigning favorable roles to more agreeable parties). We assume that the arbitrator aims to induce a particular division of the pie. We characterize his optimal split of the pie that eventually induces the desired division as the unique equilibrium outcome. Our results highlight a road map to resolve bargaining conflicts while respecting various procedural justice and efficiency concerns.

Suggested Citation

  • Emin Karagözoğlu & Kerim Keskin, 2025. "Using ultimatum power as a leverage in resolving a bargaining conflict," International Journal of Game Theory, Springer;Game Theory Society, vol. 54(2), pages 1-12, December.
    • Handle: RePEc:spr:jogath:v:54:y:2025:i:2:d:10.1007_s00182-025-00956-0
    DOI: 10.1007/s00182-025-00956-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00182-025-00956-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00182-025-00956-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jogath:v:54:y:2025:i:2:d:10.1007_s00182-025-00956-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.